Column: A host of measures could help stop occurrence of bad checks
Published 12:00 am Monday, August 19, 2002
&uot;The buck stops with the guy who signs the checks.&uot; &045; Rupert Murdoch
It is becoming increasingly difficult to write a check these days, largely due to criminal bad check writers.
Refusing to accept checks altogether would prevent receiving a bad one, but that is the wrong answer. There are still financially responsible people out there whose signatures you can trust. They should not be penalized for the actions of a handful of thieves who are spoiling it for the others. I believe that the solution lies not in making it more difficult to write checks, but rather in making it more difficult to write bad checks.
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Banks could start improving the system with the checks themselves. Have you ever noticed that some retailers will not accept low-numbered checks? Usually, this means that your check number must be at least 1,000. The problem with this policy is that banks often allow their customers to open an account with high check numbers. I once opened a checking account that began with number 5,001. Nothing, besides my own sense of integrity, would have stopped me from deliberately writing a bad check, even with a high-numbered account.
One thing that might help would be to print a date on the checks indicating how long the account has been in existence &045; for example, &uot;Account holder in good standing since April 1993,&uot; or something to that effect. That way, retailers could adapt their check policy according to how old the account was &045; six months or one year would be reasonable. If the account holder started deliberately writing bad checks all over the place, the next order of checks could read, &uot;Credit Risk.&uot; Account holders would not be penalized for accidentally writing a bad check, as long as they made amends for their mistake within 15 days. The checks would not reflect honest mistakes.
However, this would not prevent people from stealing other peoples’ checkbooks and buying everything on their wish list at the expense of somebody else’s good credit rating. To combat this possibility, banks could imprint a small digital photograph of the account holder next to their name, much like how this is already done by some credit card issuers. An added precaution could be to require a thumbprint scan when opening an account, which would be electronically verified via modem when making a purchase. If the photograph and scan did not match, the sale would be refused and the authorities notified, since the store would now have the thumbprint and description of someone trying to write checks from someone else’s account.
Retailers already can verify checks electronically in the same way they do with debit cards. One night my wife and I had dinner and paid for our meal by check. Our server took our check up front and came back with it voided out, telling us that it had been electronically verified and automatically deducted from our account. This means that under no circumstances, barring stolen checks, could we have written a bad check there. This would work for virtually any retailer with a modem.
Combining these methods &045; account start date, positive identification and electronic check approval &045; would put a serious dent in the theft-by-check industry. However, some places that would not benefit from this added security would remain. It would still be possible to write bad checks for rent, credit card payments, utilities and other mailed-in financial obligations.
One solution would be get tougher with the criminals. For example, issue arrest warrants for those who bounce checks and do not make reparations after the allotted time. Upgrade the charge to include mandatory jail time. After three strikes, it would become a felony. Finally, link the information to their Social Security number for a period of ten years, so that potential creditors may know the risks involved.
The reason so many people write bad checks right now is that the law makes it easy to do. I believe adopting the above solutions would drastically reduce bad checks. Granted, my ideas may be a bit on the extreme side, and may take away a bit of our privacy, but if they became law, the only people who would really have to worry would be those who intend to write bad checks.
Dustin Petersen is an Albert Lea resident. His column appears Mondays.